Posted by: kenwbudd | April 28, 2010

Leading Outside the Lines

Leading Outside the Lines

Balancing Hard and SoftFormal with Informal
Formal: In every company, there are really two organisations at work: the formal and the informal. The formal organisation is the default governing structure of most large companies founded in the past century.

Businesspeople recognise the formal organisation as that rational construct that runs on rules, operates through hierarchies and programs, and evaluates performance by the numbers.

If you have been trained in the “hard” disciplines like finance, technology, or operations — as so many senior managers have — you have probably learned to operate naturally in the formal domain, deploying tangible factors like job descriptions, organisation charts, process flows, and scorecards.

Informal: The informal organisation, by contrast, is an agglomeration of all the human aspects of the company: the values, emotions, behaviours, myths, cultural norms, and uncharted networks.

The power of the informal is visible in every organisation every day — it is an undeniable, emotionally resonant force. Even the most rational managers recognise that the informal organisation within a company can create effects that seem like magic, especially in situations of change or transformation.

Unexpected leaders emerge from the ranks. Passion swells up and pushes work forward. Units and operations swiftly transform themselves.

Unfortunately, there are also less positive effects: Unexpected opposition lurks in the shadows, anxiety and fear hold work back, and critical operational improvements are derailed.

Organisations that sustain high performance over time have learned how to mobilise their informal organisations while maintaining and adding formal structures, each in sync with the other and in general, people appreciate the value of “leading outside the lines”: of balancing formal and informal measures in the pursuit of higher performance.

In sports, coaches pay just as much attention to the emotional aspects of the game as they do to the skills involved.

In business, the informal organisation is most successfully mobilised when there is also a sharp focus on performance. People want to know how their informal collaboration will lead to an improvement in results.

The difficulty for any manager to understand, even one who has a predilection for the informal, is exactly how to lead outside the the formal lines.

There is, after all, no universal recipe book: The right balance of formal and informal measures will look very different depending on the company, the business, and the circumstances.

In business, leaders who are well versed primarily in formal measures may feel less comfortable dealing with what they see as the “fuzzier” aspects of an organisation.

In Conclusion
Neither approach can stand alone in a modern organisation.

Most businesspeople are concerned with achieving higher levels of performance and all the rewards that go with it.

Those who are comfortable with formal and informal approaches will make the most progress toward this goal.

The mind-set that can synthesize both into a clear, simple, integrated direction is the mind-set that differentiates the peak performers from the also-rans, be they individuals, teams, or enterprises.


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